There's a heated debate on the GDP growth rate that the government declared for the 2019-20 fiscal. Quoting the Bangladesh Bureau of Statistics (BBS), the government recently declared 5.24 per cent GDP growth in FY2019-20. Experts rather vociferously said this unbelievable rate of GDP was ‘manufactured’ in order to show the economic fallout of novel coronavirus pandemic was less due to the unprecedented disaster in the last five and half months from 17 March.
The experts considered the GDP growth a tall tale, especially because of the 'magic' in the first eight and half months of the fiscal year that apparently upturned all the negative effects on an economy that had almost come to a halt in the last three and half months. There is another reason for this disbelief: the finance minister had allegedly inflated the growth rates when he was planning minister. BBS works under the planning ministry.
The five components of GDP are, consumption, investment, government spending, exports and imports. All these components were hit hard in the last three and half months of 2019-20 fiscal, statistics provided by the government said. The existence of most of the large, small and medium productive establishments of the country was at stake because of the slump in macro-level consumption in that time. The purchasing power of 90 per cent of the people shrunk and thousands lost their jobs. Almost 40 per cent of the people in the country are below poverty line now.
It is the government that said private investment has declined to 12 per cent of the total GDP in 2019-20 from 24 per cent in the previous fiscal year. The government has also acknowledged that revenue earnings were were Tk 840 billion less than the estimated sum in the 2019-20 budget. The Annual Development Programme (ADP) expenditure of that fiscal year was 80 per cent of the revised ADP, which is generally around 90-95 per cent, the government admitted.
The government further said export revenue in that fiscal was 25 per cent less than target. The amount was $6.86 billion less than the previous year. The import expenditure also declined but a lot less than the export earnings. Then by what magic did all these sector-wise disasters not affect the GDP growth? Mr. Finance Minister, will balance the sum please?
The think-tank Centre for Policy Dialogue (CPD), in an online press conference, claimed that according to their calculations, the GDP growth rate of Bangladesh in 2019-20 fiscal was 2.5 per cent. According to them, the government’s declaration of GDP growth rate as 5.24 per cent has turned it into a ‘political number’, which was unwarranted.
Finance minister AHM Mustafa Kamal termed CPD’s GDP calculation as a ‘presumption’ and questioned how CPD came up with their alternative GDP rate. He said CPD uses BBS statistics as ‘raw material’. It does not have any separate process of collecting data. Then, he asked, how did they reach that conclusion?
It would benefit the nation if CPD responded to the finance minister's challenge and clarified their alternative statistics in detail. I strongly believe, CPD would be able to prove that the 5.24 per cent GDP growth rate was the result of ‘data doctoring’ at the behest of the government, if it presents an analysis of BBS' sector-wise statistics. Bangladesh is highly praised around the world for its GDP growth. That is why politically motivated data doctoring of GDP growth rates should be considered unnecessary and counter-productive.
GDP growth of all the countries has declined due to the coronavirus pandemic. Many countries have even experienced negative growth rates. Would it be believable that only Bangladesh was not affected badly by this pandemic?
As it is, the World Bank and IMF (International Monetary Fund) indirectly accuses all governments of Bangladesh of data doctoring. For long, World Bank, IMF and many other UN organisations do not consider the government-announced GDP growth as reliable. It is general knowledge that local and foreign institutions think other ‘vital statistics’ the BBS publishes are also increased and decreased at will. This doubt is not without basis. There are several instances of such manipulations:
1. The government shows the total population of Bangladesh as less than actual. As a result, the population growth rate has been decreased to 1.3 per cent. According to UNFPA, the rate is 1.42 per cent.
2. The per capita GDP could be increased artificially if the total nominal GDP is deducted by the ‘smaller number of population’. Recently, the government has claimed that per capita income of Bangladesh has risen from $1909 to $2064 on 30 June 2020.
3. The rate of inflation is shown less so that the real per capita GDP could be increased while calculating real GDP from the nominal GDP.
4. The government inflates the literacy rate, which the UNDP does not think credible enough for the Human Development Index.
Politics has made such practice deep-rooted among almost all the countries of the third world. During the ‘Decade of Progress’ of the autocrat Ayub Khan in Pakistan times, the rate of GDP growth of erstwhile East Pakistan used to be shown as 4-5 per cent every year. Could that hide the truth that East Pakistan was deprived like a colonial state? There is a saying in English: 'There are three kinds of lies: lies, damned lies and statistics.'
This suggests the problem of data doctoring is a very old and an oft-practiced habit. This ‘political data doctoring’ is the greatest hindrance to developing a reliable government statistics organisation in the third world countries.
Since the Second World War, developing and least developed countries got a huge amount of loans or grants from the United Nations, World Bank and other donor agencies for capacity building. But the money was wasted in the name of modernising the statistics system of the countries just because they aimed at the political gains of their governments.
There is no doubt that the institutional capacity of Bangladesh Bureau of Statistics has increased a lot in the last 49 years, thanks to foreign loans and aid. But BBS will never develop into a reliable statistics institution if this practice of data doctoring is not scrapped. Do our rulers realise this?
* Mainul Islam is an economist and former professor of economics at the University of Chittagong. This piece, originally published in the print edition of Prothom Alo, has been rewritten in English by Shameem Reza